The CTM system is a bit of a no-brainer for Australian and New Zealand businesses putting their products and services into the EU market. The system has been a raging success, due to – among other things – the fact that a CTM is a cost-effective way to cover all 28 EU member states.
But sometimes there is merit in adding national filings alongside the CTM.
For example, for brand owners which count the UK as one of their key markets, there are many good reasons to consider applying for UK national trade marks in addition to Community trade marks (which cover all of the EU Member States) as set out below.
- ‘OHIM Torpedo’: If the owner of a Community trade mark (“CTM”) threatens to bring trade mark infringement proceedings against a third party (e.g. by way of demand letter) before issuing proceedings, the third party may file an invalidity action against that CTM at OHIM. EU trade mark law provides that, in those circumstances, the CTM infringement proceedings must be stayed pending the outcome of the invalidity proceedings, unless there are ‘special grounds’ for the infringement proceedings to continue. In the UK at least, it will be very difficult to identify such ‘special grounds’ in the absence of particular circumstances of urgency. It can take several years for a final decision to be reached in invalidity proceedings at OHIM (as there may be appeals all the way up to the Court of Justice of the European Union). However, if the rights owner can rely on a UK national trade mark in infringement proceedings, this kind of ‘torpedo’ situation will be avoided as the proceedings based on the UK national trade mark will not usually be stayed.
- Avoiding oppositions based on non-UK rights: an earlier right in any of the 28 EU member states can form the basis for an opposition against a CTM. Only an earlier right that has effect in the UK can form the basis for an opposition against a UK application (thus the pool of potential opponents is considerably lessened if you file in the UK).
- Proof of genuine use: In opposition proceedings, rights owners need to prove genuine use of their trade marks where the marks they are relying on are over 5 years old from the date of registration. Similarly, proof of genuine use must be demonstrated in revocation proceedings. Whilst evidence of use of a CTM in a single member state may constitute proof of use of a CTM, this is not always the case depending on the particular facts and evidence submitted. Accordingly, proving use of a CTM can often become an onerous and time-consuming task involving gathering evidence of use in several Member States. The task of proving use of a UK national trade is more straightforward as there is only one country to focus on.
- Reputation: As with proof of use, when demonstrating reputation in a CTM, rights owners would ideally aim to provide reputation evidence in several member states in order to strengthen their arguments. However, again as with proof of use, when demonstrating reputation in a UK national trade mark, it is only necessary to provide evidence of a reputation in the UK, which makes the process less time-consuming and more focused.
- Acquired distinctiveness: Acquired distinctiveness of a CTM must be demonstrated in all those parts of the EU in which the lack of distinctiveness “bites”. For marks such as shapes and colours then, such acquired distinctiveness can only be demonstrated if it can be established that a substantial proportion of consumers in the EU as a whole has been exposed to the mark as an indication of commercial origin. Whilst it is not necessary to demonstrate acquired distinctiveness in every “nook and cranny” of the EU, rights owners will want to gather evidence from a range of Member States to ensure that they have met the requirements. This will generally be quite costly and time consuming. For UK trade marks, it is only necessary to demonstrate that a mark has acquired distinctiveness amongst a substantial proportion of consumers in the UK, which is likely to be significantly easier.
- Acquiescence: If an owner of a CTM is aware of and acquiesces for a period of five successive years in the use of a later CTM registration owned by a third party in any Member State, the rights owner is no longer able to seek to invalidate and/or challenge the use of the third party mark in any Member State on the basis of the earlier CTM. However, if the rights owner also owns a UK national trade mark, the acquiescence issue will not arise in the UK unless there have been five years of use in the UK.
- Statutory defence: Owners of UK national trade marks have a statutory defence against claims of trade mark infringement under the Trade Marks Act 1994. Although arguably this defence is incompatible with the Trade Marks Directive, it potentially provides UK trade mark owners with additional protection to third party claims.
- Notification of confusingly similar marks by UK IPO: An owner of a CTM does not receive notification from OHIM of potentially similar UK applications. The UK IPO sends automatic notifications to owners of national UK trade marks (but not to the owners of CTMs) of any potentially similar UK trade mark applications.
- Speed: It is generally faster to register a UK trade mark application than a CTM, assuming that there are no office actions or third party objections. It generally takes around 3 months to register a UK trade mark and around 4 to 5 months to register a CTM.
- Interplay with International Registrations: Proprietors of a CTM, or national trade mark in any of the EU member states can oppose a CTM application, but only proprietors of a CTM or UK trade mark can oppose a UK trade mark application. Therefore, a UK trade mark application is often a safer basis for an International Registration than a CTM given the risk of “central attack”. If the base application does not mature to registration within the first 5 years of the registration date of the International Registration this will lead to the refusal of the International Registration.